Anaheim Family, 2 Others Charged in Food Stamp Fraud : Indictments: They are accused of illegal trafficking in more than $20 million in coupons.

In what is being billed as the largest food stamp fraud case in Southland history, an Anaheim family and a South Gate couple were charged Tuesday with illegal trafficking in more than $20 million worth of food stamps in the last four years.

Federal grand jury indictments returned Tuesday accuse the two families, owners of two small neighborhood grocery markets near downtown Los Angeles, with unlawfully buying food stamp coupons for cash. The grocery owners allegedly bought the coupons for as little as 50% of their face value and redeemed them with the federal government for full cash value.

Charged in a 27-count indictment were Anaheim residents David Rodriguez, 52, his wife, Juana, 44, and their son Eduardo, 25, who operated David’s Produce. Also charged in a 37-count indictment were South Gate residents Evaristo Pereira, 56, and his wife, Maria Elena, 34, owners of Pereira Produce.

“It is very disheartening to encounter abuses of the federal food stamp program,” U.S. Atty. Terree A. Bowers said. “When individuals corruptly manipulate the program by paying cash for food stamps, they undermine all of the beneficial aspects of the program and inevitably deprive children of badly needed wholesome meals.”

All the defendants, except for Eduardo Rodriguez, who is still being sought, were in custody Tuesday, according to Assistant U.S. Atty. Steven M. Arkow. If convicted, they face maximum penalties of five years in prison and $250,000 on each count, prosecutors said.

“This is the largest food stamp fraud case indictment in Los Angeles County in history,” Arkow said. “These stores were among the highest redeemers of food stamp coupons in all of Los Angeles County.”

Neither the Pereiras nor the Rodriguezes could be reached for comment.

According to U.S. Department of Agriculture statistics, the two neighborhood groceries redeemed more food stamps in 1991 than all but one major Los Angeles chain.

According to the indictment, confidential informants and federal investigators sold food stamps in quantities ranging from $60 to $8,000 at a time to the grocery store owners for cash.

Arkow said he could not comment “on who else other than the undercover buyers was cashing the food stamps.” He did say, however, that a typical eligible food stamp recipient receives no more than about $200 in coupons a month, Arkow said. The grocery owners, according to the indictments, allegedly made profits of up to 50% on each transaction.

On Feb. 10, 1992, for example, Evaristo Pereira allegedly bought $290 worth of food stamp coupons for $145 from a confidential informant. Two months later, the indictment states, Pereira bought $7,500 worth of food stamps from an undercover Department of Agriculture agent for $3,750.

The grocery owners sought to hide their cash purchases of food stamps by evading federal currency transaction reporting requirements, according to the indictment. The defendants allegedly made repeated cash withdrawals in amounts of just under $10,001 to avoid triggering their banks’ obligations to file transaction reports with the federal government.

Between 1989 and 1992, the Pereiras made 516 deposits of food stamp coupons worth $11.3 million into federal redemption accounts. The redemptions went from $7,315 in 1989 to $8.2 million last year.

The Pereira indictment cites seven illegal purchases for $11,661 of food stamps worth $23,600.

The Rodriguez indictment cites the purchases of $10,500 worth of food stamps for $5,250 last year. According to the court papers, David and Juana Rodriguez made 325 deposits of food stamp coupons valued at $9.4 million in their federal redemption account between September, 1991, and January, 1993.

Arkow said the Rodriguezes used a government-approved bank account for depositing food stamps set up at a Bank of America in East Anaheim.